Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

      by DAN CHARLES  February 22, 2012

If you happen to notice sometime later this year that you’re suddenly paying a lot more for orange juice, you can blame America’s food safety authorities. The U.S. Food and Drug Administration, after several weeks of deliberation, has blocked imports of frozen, concentrated orange juice from Brazil, probably for the next 18 months or so, even though the agency says the juice is perfectly safe.

The FDA’s explanation is that its hands are legally tied. Its tests show that practically all concentrated juice from Brazil currently contains traces of the fungicide carbendazim, first detected in December by Coca-Cola, maker of Minute Maid juices. The amounts are small — so small that the U.S. Environmental Protection Agency says no consumers should be concerned.

The problem is, carbendazim has not been used on oranges in the U.S. in recent years, and the legal permission to use it on that crop has lapsed. As a result, there’s not a legal “tolerance” for residues of this pesticide in orange products.

So, according to the FDA, any speck of this fungicide, if found in orange juice, is an illegal adulterant and won’t be allowed, even though residues of the same fungicide are allowed in many other foods, including apple and grape juice. (The oddity of the situation prompted FDA Imports, an industry consultant on food regulation, to publish a slightly satirical graphic on the topic.)

Brazil’s juice, by the way, still is welcome in Europe, its biggest export market. It will take about 18 months before the country’s juice is once again free of carbendazim and can enter the U.S. market again.

In 2010, about 11 percent of all the orange juice consumed in America came from Brazil, according to the U.S. Department of Agriculture. That share may seem modest, but economist Thomas Prusa of Rutgers tells The Salt that cutting it out could boost wholesale prices of concentrated orange juice by 20 to 45 percent.

Prusa says the impact is magnified because orange juice already is in short supply.

“We were not exactly covered up in juice when this happened,” says Kristin Gunter, executive director of the Florida Citrus Processors Association. The U.S. orange juice industry has faced shrinking production here at home because of problems with diseases — especially one called citrus greening. The USDA has mounted a campaign to keep the incurable disease from spreading across the country.

As a result, U.S. citrus growers are surprisingly unhappy about the misfortune of their Brazilian competitors. They worry that a shortage will drive prices up and drive consumers away from orange juice entirely. “We pretty much all understood that it’s not a good thing,” says Gunter. “It’s hard to sell juice if the price is going up.”

~~~~~

Check out Natalies Orchard Island Juice Company-   They are the ONLY Made in USA Certified Orange Juice not only in the United States, but in the WORLD!  No one else can say that.

By Howard Wial @CNNMoney February 23, 2012: 5:34 AM ET

Howard Wial is a fellow for the Brookings Institution Metropolitan Policy Program.

At first glance, manufacturing jobs would appear to be a dying breed.

The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years, the trend in manufacturing employment for the last 30 years has been downward.

That has led some to argue that long-term job loss in the industry is inevitable. But our research shows otherwise.

There are two common versions of the “inevitability” argument. One holds that U.S. manufacturing wages are too high to be internationally competitive. The other maintains that manufacturing job losses are the result of productivity growth. Both arguments are wrong.

High wages can’t be the culprit, because wages in U.S. manufacturing are not especially high by international standards. As of 2009, 12 European countries plus Australia had higher average manufacturing wages than the United States. Norway topped the list with an average manufacturing wage of $53.89 per hour, 60 percent above the U.S. average of $33.53.

Manufacturing: Not a magic pill for the economy

Moreover, the United States lost manufacturing jobs at a faster rate since 2000 than several countries that paid manufacturing workers even more. Among the 10 countries for which the Bureau of Labor Statistics tracks manufacturing employment, Australia, France, Germany, Italy, the Netherlands and Sweden both had higher manufacturing wages and lost smaller shares of their manufacturing employment than the United States between 2000 and 2010.

Nor is technology to blame. Factories have become more mechanized, so fewer workers are needed to produce the same amount of goods. If that were the end of the story, then technology-driven productivity growth would indeed reduce manufacturing employment.

But it’s not the whole story. Technology increases productivity. And when productivity grows, manufactured goods become less expensive and the market for them expands. That creates a demand for more workers, and that extra demand usually outweighs the labor-saving impact of mechanization. The result is more manufacturing jobs, not fewer.

And there is evidence that productivity wasn’t killing jobs. Between 2000 and 2007, manufacturing productivity grew at an average annual rate of 3.9 percent, nearly the same as the 4.1 percent average annual rate during the 1990s.

If productivity growth were the cause, then job losses should’ve been equally bad in the 1990s. But that wasn’t the case. The nation lost an average of only 0.2 percent of its manufacturing jobs per year during the 1990s, compared to 3.0 percent per year between 2000 and 2007.

If neither productivity growth nor high wages cost us manufacturing jobs, what did?

One likely reason is there was insufficient productivity growth in U.S. manufacturing. If productivity had grown more rapidly, American manufactured goods would have been more competitive with those of other countries.

Another likely cause was incentives for manufacturers to offshore work to low-wage countries, which accelerated after China joined the World Trade Organization in 2001. After China’s accession to the WTO, the U.S. trade deficit with China grew at an accelerating rate – due mainly to offshoring of manufacturing.

Manipulated currencies and artificially low wages of China and some other low-wage countries made them attractive locations for manufacturers looking to save on labor costs.

But there is hope for the future.

Both offshoring and insufficient productivity were the result of public policy choices. The United States could have reduced the incentives for manufacturers to offshore jobs by taking a harder line against China’s currency manipulation and wage suppression. It could have improved productivity growth at home by increasing rather than cutting funding the Manufacturing Extension Partnership program, which helps small and medium-sized manufacturers improve performance.

Chinese wages are now growing faster than productivity and manufacturers are beginning to reconsider whether the costs of offshoring outweigh the benefits.

Funding for the Manufacturing Extension Partnership program has increased, and other federal and state efforts to strengthen manufacturers’ performance are taking shape.

These trends are the basis for a more robust federal manufacturing policy. If we build that, the United States can stem and even reverse its losses of manufacturing jobs.

Brian Sozzi, Contributor   2/16/2012

The grand theme I want to put on the table is the concept of onshoring, sometimes called reshoring, which is the bringing back of U.S. jobs from overseas supply chains.

U.S. businesses have started to realize that while workers in far away lands garner miniscule wages compared to their U.S. counterparts, having operations outside of the country can be a strategic disadvantage.  The speed and structure in which information is consumed has caused U.S. consumers to demand top quality products and to want to buy them whenever they please.

Having a manufacturing plant domestically aids in the quicker movement of goods from design table to sales floor.  Furniture maker Ethan Allen is great example of a manufacturer producing most of its products in the U.S. and doing customization for clients, setting itself apart from price-point focused competitors.

Corporate managers are simply getting over their infatuation with cheap international labor and analyzing the total costs of doing business in the U.S. compared to say, China or India.

There is a dollop of icing on the cake here as well.  The topic of focusing on onshoring to boost employment levels seems to be an area of agreement between bickering Republicans and Democrats.  Republican presidential hopeful Rick Santorum, for example, wants to zero out the U.S. corporate tax for manufacturers.

Anytime the major political parties agree on anything, even the slight thing, it’s cause to sit up and take notice from an investment standpoint.  The Donkeys and Elephants may be a little apart on how to precisely shepherd along the corporate onshoring interest, but at least they are talking the same language.  It’s high time they do find common ground if the following is to be reversed:

• Manufacturing employment has fallen by approximately 37% since 1980.
• According to a survey done by the Manufacturing Institute and Deloitte, some 600,000 manufacturing jobs are currently unfilled due to a mismatch between job requirements and experience.

I have read a fair number of columns bantering about onshoring.  Is it overhyped?  Do we really need more jobs in the service sector U.S. economy?  The debates are almost endless.  Unfortunately, though, I have failed to stumble upon investment strategies to profit from onshoring, which has already begun to a certain extent, and could likely gain steam in the years ahead.

Buy-and-hold investors, this should be right in your wheelhouse: a highly probable future event to build positions around in companies with durable competitive advantages.

A few names that come to mind:

• Waste Management: Owns 260 plus landfills and is the largest waste management business in the U.S.  More manufacturing production means more waste to be piled into the company’s green bins.

• ADP: Benefits in two manners.  First, workers are hired to run new domestic manufacturing plants (hopefully by people that used the downturn to attain new technological skills).  Second, there should be a trickle down effect in the overall employment sector via a ramp in higher paying manufacturing jobs.

• Dunkin Brands: “America Runs on Dunkin” as the brand’s slogan goes.  The company’s moat is not as wide as an ADP or Waste Management, but more U.S. manufacturers should mean more egg sandwiches (which Starbucks does not do superbly) and coffee.  Store penetration is increasing in areas of the country that are manufacturing oriented.

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

By STUART ELLIOTT  Published: February 15, 2012

BLUE-COLLAR workers in fields like manufacturing — particularly when they make products on American soil — are again becoming a favorite subject for white-collar workers on Madison Avenue.

The trend was born of the economic worries that followed the financial crisis in 2008. Recently, it is gaining steam — appropriate, since the ads often use blasts of steam to signal something is being built — with proposals in Washington to offer incentives to encourage the location or relocation of factories in the United States.

“We continue to see very heavy emotional response to anything that would leverage against the bad economy,” said Robert Passikoff, president at Brand Keys, a brand and customer-loyalty consulting company in New York.

The trend is even extending beyond advertising. For instance, “ABC World News” is running a series of reports under the rubric “Made in America,” in which anchors and reporters celebrate a preference for buying merchandise made in this country.

The most notable moment to date in the trend came on Feb. 5, when Super Bowl XLVI was played, as marketers paid NBC tens of millions of dollars to run commercials with work themes before the game, during the game and during halftime.

Those commercials included spots for General Electric, part of a campaign carrying the theme “G.E. works,” that celebrated products like refrigerators and turbines being built in the United States; a spot that showed a bottle of new Bud Light Platinum beer being produced in a plant that looked more like a factory than a brewery; and a spot for Hyundai, featuring workers employed at its first American factory, in Montgomery, Ala.

The Hyundai commercial, titled “All for One,” “was intended to celebrate Hyundai’s spirit of trying new things,” said Steve Shannon, vice president for marketing at Hyundai Motor America. “An example is certainly our growth and capabilities in the U.S.”

“Although we didn’t develop ‘All for One’ specifically to communicate a ‘made in the U.S.A.’ message,” he added, “it became part of the story we wanted to tell.”

•

No work-themed commercial that Super Bowl Sunday drew more notice than a spot from the Chrysler Group, known as “Halftime in America,” which featured Clint Eastwood declaring that “the world’s going to hear the roar of our engines.” The spot generated a national debate that was even spoofed on “Saturday Night Live.”

The purpose of the Chrysler commercial, and the others in the genre, was summarized in a speech by Sergio Marchionne, chief executive at the Chrysler Group, to a group of dealers. The intention is “a call to take action to reconsider and contribute to this great land’s economic progress,” he said. “It’s simply a way of saying that everyone, in this land, has the right to dream and the power to turn that dream into reality.”

Another example of the trend also arrived last week when the Tropicana Products division of PepsiCo augmented a campaign for Tropicana Pure Premium orange juice, which carries the theme “Tap into nature,” with ads that play up the provenance of the oranges.

“Grown, picked and squeezed in Florida,” print ads proclaim. “Tropicana Pure Premium is 100% pure Florida orange juice.” In a television commercial that made its debut during the CBS coverage of the Grammy Awards, orange crates labeled “Tropicana Pure Premium 100% Florida” are displayed four times in 30 seconds.

Tropicana Pure Premium had been made solely with Florida oranges until 2007, when PepsiCo began mixing in oranges from Brazil.

That decision, and a similar step by the Coca-Cola Company, which sells orange juices bearing brands like Minute Maid and Simply Orange, led a competitor, Florida’s Natural, part of Citrus World, to add a logo to its packages composed of an American flag and the words “Product of U.S.A.”

The USA-C™ Seals show that a the company has gone through a rigorous supply chain audit to verify compliance with national standards.

(Now that Tropicana Pure Premium has returned to its all-American orange sourcing, Florida’s Natural is proclaiming in ads and on its Web site: “All Florida. Never imported. Who can say that?”) - To that I say, Natalie’s Orchid Island Juice Company is the ONLY Made in USA Certified Orange Juice in the United States of America.  Look for the USA Certified Seal. 

The timing of the Tropicana Pure Premium campaign “is based on 100 percent Florida Tropicana Pure Premium being nationally available,” said a spokesman for Tropicana Products, Michael Torres.

•

In several instances, there is more to the American-centric efforts by marketers than commercials. For instance, Tropicana Products also changed the labels on packages of Tropicana Pure Premium, adding a sentence that reads “100% pure Florida orange juice.”

And the “G.E. works” campaign is being accompanied by initiatives at General Electric like a four-day conference in Washington this week, meant to shine a spotlight on “what works in America,” as the company described it.

At the conference, Jeffrey R. Immelt, chairman and chief executive at G.E., discussed plans that include the opening of three G.E. Aviation plants in 2013, in Alabama, Mississippi and Ohio, and the company’s hiring of 5,000 American veterans in the next five years.

For all the drumbeating for American workers, said Mr. Passikoff of Brand Keys, his research indicates that many consumers do not shop specifically “for something made in one place or another” because they have heard “in the past 20 years so much talk of a ‘global economy.’ ”

For example, in the automotive category, where a car is built “is not one of the drivers, pardon the pun” in deciding whether or not to buy it, he added.

A version of this article appeared in print on February 16, 2012, on pageB6 of the New York edition with the headline: This Column Was 100% Made in America.

For a list of the current Made in USA Certified companies, please visit The Made in America Movement website. The list is updated weekly as new manufacturers obtain the USA Certification.

By Laura MacInnis | Reuters

MILWAUKEE (Reuters) - President Barack Obama kept up his attack on Chinese trade practices during a campaign-style visit on Wednesday to a Midwest factory, where his call to bring jobs back home was intended to resonate with voters in an election year.

The day after meeting China’s leader-in-waiting, Vice President Xi Jinping, at the White House, Obama cited America’s chief rival a number of times in a speech to promote the potential of “insourcing” jobs back to America from overseas.

“I will not stand by when our competitors don’t play by the rules,” he told workers at Master Lock, a company he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010.

“That’s why I directed my administration to create a Trade Enforcement Unit with one job: investigating unfair trade practices in countries like China,” he said in prepared remarks.

Obama took a firm line over trade on Tuesday during his Oval Office meeting with Xi, who is in line to assume the Chinese presidency in March 2013.

This tough stance should appeal to voters in election battleground states like Wisconsin, where Beijing is often blamed for killing American jobs.

Republican presidential hopeful Mitt Romney, a former private equity executive, accuses Obama of being too soft on China and lacking the executive or other leadership experience to steer the U.S. economy toward lasting recovery.

Master Lock, a unit of Fortune Brands Home & Security, is the world’s largest manufacturer of padlocks and related products to secure homes, cars and bicycles. Its story is a positive one for Obama, who must tout his economic leadership to secure another White House term.

The firm says its Milwaukee plant is running at full capacity for the first time in 15 years – an example the White House is eager to replicate as the November 6 election nears.

“They’re deciding that if the cost of doing business here is no longer much different than the cost of doing business in countries like China, they’d rather place their bets on America,” said Obama.

It was his first stop in a three day campaign-style swing when the Democrat will raise funds in California and stop at aircraft manufacturer Boeing in Washington state.

How to cope with a rising China – and compete against cheap Chinese exports – is one of the toughest challenges for Obama to navigate as the election approaches, particularly as opinion polls showing rising U.S. voter frustration with the Asian economic powerhouse.

(Reporting By Laura MacInnis; Editing by Peter Cooney and Cynthia Osterman)

David Paul – President, Fiscal Strategies Group  -  Posted: 02/13/2012 8:30 am

Apple aficionados suffered a blow a couple of weeks ago. All of those beautiful products, it turns out, are the product of an industrial complex that is nothing if not one step removed from slave labor.

But of course there is nothing new here. Walmart has long prospered as a company that found ways to drive down the cost of stuff that Americans want. And China has long been the place where companies to go to drive down cost.

For several decades, dating back to the post World War II years, relatively unfettered access to the American consumer has been the means for pulling Asian workers out of deep poverty. Japan emerged as an industrial colossus under the tutelage of Edward Deming. The Asian tigers came next. Vietnam and Sri Lanka have nibbled around the edges, while China embraced the export-led economic development model under Deng Xiaoping.

While Apple users have been beating their breasts over the revelations of labor conditions and suicides that sullied their glass screens, the truth is that Foxconn is just the most recent incarnation of outsourced manufacturing plants — textiles and Nike shoes come to mind — where working conditions are below American standards.

While the Apple-Foxconn story has focused attention on the plight of workers living in dormitories who can be summoned to their work stations in a manner of minutes, the story has also become part of the debate about whether the U.S. should seek to bring back manufacturing jobs or should instead accept the conclusions reached by some economists that not only does America not need manufacturing jobs, but it can no longer expect to have them.

Nobel laureate Joseph Stiglitz argued recently that our difficulties recovering from the 2008 collapse are a function of our migration from a manufacturing to a service economy. While this migration has been ongoing for years, Stiglitz has concluded that the trend is irreversible. His historical metaphor is the Great Depression, which he suggests was prolonged because the nation was in the midst of a permanent transition from an agrarian economy to manufacturing, as a revolution in farm productivity required a large segment of the labor force to leave the farm.

The problem with this deterministic conclusion that America can no longer support a manufacturing sector is that it seems to ignore the facts surrounding the decline that we have experienced. In his recent article, Stiglitz notes that at the beginning of the Great Depression, one-fifth of all Americans worked on farms, while today “2 percent of Americans produce more food than we can consume.” This is a stark contrast with trends in the U.S. manufacturing sector. Manufacturing employment, which approximated 18.7 million in 1980 has declined by 37%, or 7 million jobs, in the ensuing years. However, the increase in labor productivity over that timeframe — 8% in real terms — explains little of the decline. Unlike the comparison with agriculture, where we continue to produce more than we consume, most of the decline in manufacturing jobs correlated with the steady increase in our imports of manufactured goods and our steadily growing merchandise trade deficit.

The chart below, based on data from the Bureau of Economic Analysis, illustrates the growth in personal spending on manufactured goods in the United States over the past three decades, and the parallel growth in the share of that spending that is on imported goods. These changes happened over a fifty-year period. Going back to the 1960s, we imported about 10% of the stuff we buy. By the end of the 1970s — a period of significant declines in core industries such as steel and automobiles — this number grew to over 25%. As illustrated here, the trend continued to the current day, and we now import around 60% of the stuff we buy.

Imports Share of Personal Consumption of Goods

Over the same timeframe, as illustrated below, the merchandise trade deficit — the value of goods we import less the value we export — exploded. By the time of the 2008 collapse, the trade deficit in manufactured goods translated into 3.5 million “lost” jobs, if one applies a constant metric of labor productivity to the value of that trade deficit.

Estimated Value of Balance of Trade Deficit in Goods on Domestic Employment

This is where Stiglitz’ comparison with the Depression era migration from an agrarian economy breaks down. As he duly notes, the economics of food production has changed, and today America’s agricultural sector feeds the nation and sustains a healthy trade surplus as well, with a far smaller share of the American workforce. In contrast, the decline in manufacturing jobs reflects the opening of world labor markets. Unlike agriculture, we are not self-supporting in manufactured goods, we have simply decided to buy abroad what we once made at home.

This shift has been embraced across our society. For private industry, outsourcing to Asia has been driven by profit-maximizing behavior and the pressures of surviving in competitive markets. For consumers, innovations in retail from Walmart to Amazon.com have fed the urge to get the greatest value for the lowest price. And for politicians — Democrats and Republicans alike — embracing globalization was part of the post-Cold War tradeoff: We open our markets, and the world competes economically and reduces the threat of nuclear conflict.

The notion that American industry, consumers and politicians were co-conspiring in the destruction of the American working class was a discussion relegated to the margins of public discourse, championed among others by union leaders, Dennis Kucinich on the left, Pat Buchanan on the right and Ross Perot, while largely dismissed by the mainstream media.

While Apple has been pilloried from National Public Radio to the New York Times for its effective support of a slave economy, most electronics consumer goods are now imported. The irony of the Apple story is that the Chinese labor content may well not be the cost driver that we presume it to be. As in many other industries, the costs of what is in the box can be a relatively small share of total costs, when product development, marketing, packaging and profits are taken into account.

This, of course, is why China is not particularly happy with their role in the Apple supply chain. When the profits of Apple products are divided up, far more of it flows to Cupertino than to Chengdu. And that is the reality of modern manufacturing. Based on National Science Foundation data on the value chain of the iPad, for example, final assembly in China captures only $8 of the $424 wholesale price. The U.S. captures $150 for product design and marketing, as well as $12 for manufactured components, while other nations, including Japan, Korea and the Taiwan, capture $76 for other manufactured components.

If anything, the NSF data — and China’s chagrine — reflect a world in which the economic returns to design and innovation far exceed the benefits that accrue to the line workers who manufacture the product. This is one part of the phenomenon of growing inequality, and would seem to mitigate the complaint that is often made that America no longer “makes things.” We may not make things, but we think them up and as the NSF data suggests, to the designers go the spoils.

Yet there is no fundamental reason that the decline in manufacturing jobs in America should be deemed inevitable and permanent. For all the talk about the number of engineers in China, the fundamental issue remains price. As a friend who is a consulting engineer who works with Apple in China has commented, “Yeah, they have engineers, but the driver is cost, cost, cost. And the labor quality is awful. We lose a lot of product and have to stay on top of everything, but at $27 per day, you can afford a lot of management.”

This argument conflicts with Stiglitz deterministic thesis. Just as manufacturing jobs left the United States, they can come back as economic conditions change. As wage rates rise in other countries, one competitive advantage of outsourcing shrinks. And if nations — from China to Taiwan — migrate away from their practice of pegging their currencies to the dollar, foreign currency risk exposure will offset some of the cost advantages of outsourcing. And today, as newly industrialized nations like Brazil have seen their own manufacturing sectors ravaged by mercantilist competitors, there is a growing understanding for the need for order and fair rules to govern the forces of globalization.

The Apple-Foxconn affair spooked consumers of Apple products — at least for a news cycle or two. Like Claude Rains in Rick’s Cabaret, we were shocked to confront the reality of labor conditions in China. But the story was less about China than about us. That Foxconn could put eight thousand workers to work within thirty minutes to accommodate a last minute design change by Steve Jobs was not — as Jobs suggested in a meeting with President Obama — an argument for why those jobs could never come back to America, but rather it was illustrative of the astonishing narcissism of the Apple world.

It is true, no American factory could deliver for Apple as Foxconn did. But on the other hand, there really was no need to. That story was less about what Foxconn could deliver than what Foxconn’s customer had the audacity to demand.

This story raised the question of whether we care where our products are made. The answer is unclear, however many Americans have long cared about purchasing cars made in this country, and Clint Eastwood’s Super Bowl ad has raised awareness of this question. What is clear is that if Americans care about where their products are made, companies will care. Therefore, even as the president promoted tax credits for insourcing — the new word for bringing those jobs back — perhaps another step would be to build on the power of choice. Perhaps not all Americans care where their products are made, but many certainly do. But even if one does care, it tends to be difficult to find out.

Perhaps a simple step would be for companies to provide that information to consumers. Even if it was voluntary labeling, knowing who chose to provide information to their customers would tell many of us all we need to know. Then we could find out whether the Apple story really changed anything, and whether consumers might be willing to take more into account that the last dollar saved if it enables us to sustain a diversified economy into the future.

The USA-C™ Seals show that a company bearing these trust marks has gone through a rigorous supply chain audit to verify compliance with national standards.

One way to know for sure if a manufacturer is absolutely Made in USA is to look for the Made in USA Certified Seal.

MADE IN USA CERTIFIED® is the only Registered “Made in USA Certified” Word Mark with the U.S. Patent and Trademark Office.

Made in USA Certified Inc.  is the leading non-partisan, independent third party, certification company for the “Made in USA”, “Product of USA” and “Service in USA”claims.  The USA-C™ Seals show that a company bearing these trust marks has gone through a rigorous supply chain audit to verify compliance with national standards.

Former President Bill Clinton in his New York Times Best Selling book, “Back to Work, Why We Need Smart Government for a Strong Economy” wrote; “To help us make an American choice, on these and other issues, a Florida company, Made in USA Certified  verifies companies’ claims that the materials and manufacturing are domestic.”

More U.S. small businesses are steering their orders to American factories, such as Tennessee-based Bristol Custom Solutions, as costs go up in China.

By Parija Kavilanz @CNNMoney  February 13, 2012: 11:51 AM ET

NEW YORK (CNNMoney) — U.S. small businesses that initially rushed to Chinese factories to get their products made are now dumping them for American manufacturers.

And the shift is gaining traction, said industry experts who match U.S. small companies with domestic firms.

Mitch Free, the founder and CEO of Atlanta-based MFG.com, said his company has seen a 15% uptick in inquiries since 2009 from U.S. firms looking for American factories to replace their Chinese suppliers.

MFG.com is one of the largest online directories used by businesses to find domestic manufacturers.

One reason behind the trend is that “Chinese manufacturing has become expensive,” Free explained.

Another is that the U.S. economy is still uncertain. Most small businesses are forced to order large quantities to justify costs when dealing with companies overseas, he said. And that’s a risky move if American consumers are not splurging yet.

Manufacturers closer to home allow small businesses to order smaller batches, which means less of their money is tied up if their inventory is unsold, he said.

Revive Made in USA? Easier said than done

WindStream Technologies opened a new manufacturing facility in North Vernon, Ind., last September to produce small wind turbines for home use.

WindStream Technologies knows well the value of manufacturing in the United States.

In December 2010, the startup selected a Chinese factory to make 35 prototypes of its wind turbines, because they wanted them “quickly and cheaply,” said David Dingman, Windstream’s lead mechanical engineer.

It was a disaster. “The prototypes that the Chinese manufacturer sent back to us were junk,” said Dingman. “There were parts that were put upside down. Other parts were poor quality. Some even fell off.”

WindStream decided not to have the final products made in China.

The company was able to snag U.S. manufacturers with the help of MFG.com.

And last month, it started mass producing its small wind turbines for home use at its new 45,000-square-foot manufacturing facility in North Vernon, Ind. The company employs 30 workers and is hoping to ramp up to 100, if it lands a deal to sell the turbines at a mass retailer, said Dingman.

WindStream now has its turbine covers made in Chicago, while some metal parts are produced in Ohio.

Some of the turbines parts are still made in China, simply because the raw materials to make them don’t exist in the United States, said Dingham. But “the Midwest proved to be terrific for us,” he said.

Indeed. WindStream produces its turbines at a 10% lower cost per unit compared to what the company would have paid in China, thanks to its American suppliers that provide competitive prices and the elimination of overseas shipping and travel costs.

Del Mar, Calif., entrepreneur and inventor Julie Zizka actually liked the way her tote bags looked after a Chinese manufacturer produced 5,000 of them for her in 2008.

But she still was not a fan of having her manufacturing done overseas. She had concerns about production delays and fretted about how the extensive amount of transportation used was hurting the environment. What’s more, she noticed that her customers were preferring products that were made in the United States.

By 2011, she was looking for a U.S. manufacturer to produce her “Tote Buddy,” a colorful tote for storing reusable plastic bags.

She came across one after searching online and seeing ads for Bristol Custom Solutions, which heavily advertises on MacRAE’s Blue Book.

MacRAE’s has seen a pickup in inquiries — just like Zizka’s — from companies wanting to replace Chinese suppliers with American ones, said Lori Meloche, MacRAE’s vice president of marketing.

The directory — first published in the United States in 1893 as a “blue-colored book” — has since evolved into a website with more than 1.2 million North American industrial manufacturers, which averages 1.5 million users monthly.

What small firms want from Obama’s manufacturing plan

Zizka connected with Bristol, a 26-year-old, Tennessee-based manufacturer, best-known for making secure locking bags used by banks and the federal government to transport cash and other valuables.

“People have been contacting us all the time lately, telling us they don’t want to produce their products in China,” said Brandon Cantrell, Bristol’s general manager.

When Zizka sent Bristol a sample of the tote, the company redesigned it and brought down some of her costs, said Cantrell.

Today, Bristol is making 1,000 new Tote Buddy bags for sale this spring. For Zizka, the unit price for one of her Tote Buddy bags made in Cantrell’s factory is still 170% higher than for one made in the Chinese factory, said Cantrell.

But that doesn’t bother Zizka.

“My customers want my bag made in the U.S.,” she said, “I’m willing to absorb that cost if I can control the quality, get them to my customers faster and help the environment as well.”

WASHINGTON (Reuters) – General Electric Co plans to hire 5,000 U.S. military veterans over the next five years and to invest $580 million to expand its aviation footprint in the United States this year.

The largest U.S. conglomerate unveiled the moves ahead of a four-day meeting it is convening in Washington starting on Monday to focus on boosting the U.S. economy, which has been slow to recover from a brutal 2007-2009 recession.

“We should have the confidence to act and to restore American competitiveness,” Chief Executive Jeff Immelt, a top adviser on jobs and the economy to President Barack Obama, said in a statement.

The U.S. unemployment rate — seen as the main barrier to a move vibrant recovery — fell to a near three-year low of 8.3 percent in January, helped in part by the manufacturing sector adding about 50,000 workers. Even with that improvement, 23.8 million Americans remain out of work or underemployed, which is keeping the economy a key issue heading into November’s presidential elections.

The world’s largest maker of jet engines plans this year to open three new U.S. aviation plants, in Ellisville, Mississippi; Auburn, Alabama, and Dayton, Ohio. After cutting headcount significantly during the recession — as did its major peers including United Technologies Corp and Caterpillar Inc — GE has added about 9,000 U.S. workers since 2009, and has already announced plans to hire another 4,500 people.

The Fairfield, Connecticut-based company, whose operations range from making loans to mid-sized businesses to manufacturing railroad locomotives, plans to discuss these moves at the Washington meeting. Boeing Co CEO James McNerney and Dow Chemical Co CEO Andrew Liveris are also scheduled to speak.

(Reporting By Scott Malone; Editing by Muralikumar Anantharaman)

By KATE LINEBAUGH And JAMES R. HAGERTY

U.S. companies, facing slowing markets and rising costs around the world, are taking a new look at their home market.

With growth slowing in China and a slump gripping much of Europe, companies are adding capacity in the U.S., replacing aging equipment and even moving overseas production back from low-cost labor markets, a sign that corporate America could be poised to take a bigger role in the economic recovery.

Christoph HitzUnion Pacific expects to buy twice as many locomotives this year, spending upward of $400 million.

The pace of earnings growth at companies slowed in the fourth quarter, and there are signs that profitability is falling. That is prompting companies ranging from beverage maker Coca-Cola Co. to industrial supplier Emerson ElectricCo. to disclose cost cuts. But after keeping a tight lid on costs for the past few years, many other companies are expanding capacity to meet rising demand.

WSJ’s Bob Hagerty has the story of companies bringing staff and equipment back to the U.S. in the face of economic uncertainty in Asia and Europe. AP Photo/Damian Dovarganes

United Rentals Inc., the world’s largest equipment rental company, plans to increase its capital spending by about a third, to $1 billion, this year as more construction and industrial companies opt to rent rather than own equipment like elevated forklifts and backhoe loaders.Cummins Inc., which makes engines for trucks and heavy equipment, is boosting its capital spending to more than double the rate of two years ago.

Carlisle Companies, a small conglomerate that makes insulation, tires and restaurant supplies, plans to open two new plants in the U.S. and bring tire production back to the U.S. from China.Union Pacific Co. expects to buy twice as many locomotives this year, spending upward of $400 million. The auto industry is dusting off idled U.S. factories, adding work shifts and expanding production from Chattanooga, Tenn., to Belvidere, Ill., on rebounding car and truck sales. Some auto makers even hope to use the U.S. as a manufacturing base to export autos and auto-parts to Latin America and Asia.

U.S. businesses increased their investments in December. According to the Commerce Department, new orders for nondefense capital goods excluding aircraft, a proxy for how much companies spend on equipment, climbed 2.9% from November. That ended two months of declines, suggesting businesses are becoming more confident. Compared with a year earlier, companies shipped 9% more.

“Companies have piled a lot of cash on the balance sheet and delayed a lot of purchases,” said Joseph LaVorna, Deutsche Bank‘s chief U.S. economist, who expects capital expenditures, or capex, to grow in excess of 10% this year. “The capex story is very much alive and well, and capex and hiring go hand-in-hand.

There are signs that hiring may be picking up as companies expand facilities. Job growth in January was its highest level since April, with unemployment falling for the fifth consecutive month.

In addition, stubborn construction markets are showing signs of life, and that is helping companies like Caterpillar Inc., according to Andy Kaplowitz, a Barclays Capital analyst. The Peoria, Ill.-based equipment maker notched a 31% increase in its North American construction business, compared with Barclay’s estimate of a 20% gain.

“I’m feeling better about the U.S. economy than I was 12 months ago, for sure,” said Patrick Ward, chief financial officer at Cummins.

Fortune Brands Home & Security Inc., whose products include Master locks and Moen faucets, recently boosted its capital spending plans for 2012 to $80 million, up about 17% from last year, after seeing modest improvement in the U.S. economy, said Chris Klein, CEO of the Deerfield, Ill., company.
“It isn’t off to the races yet,” Mr. Klein said of the economy, “but it is definitely firming up.”

That may not mean major job gains. Most of the capital spending is on equipment that will improve production efficiency. For now, Fortune Brands has plenty of spare capacity and isn’t envisioning new plants. Its 12,000-person U.S. work force probably will expand only slightly this year, with gains mainly in product development and marketing, Mr. Klein said.

—Bob Tita contributed to this article.

Write to Kate Linebaugh at kate.linebaugh@wsj.com and James R. Hagerty atbob.hagerty@wsj.com

BY BRIAN JOHNSON AND ENJOLI FRANCIS  -  WASHINGTON, Feb. 7, 2012

As Walmart announced plans today to label certain foods with a new green “Great for You” label, some diet and nutrition experts told ABC News they applauded the move, while others questioned whether a company that sells food could set objective standards for what is healthy.

Dr. Darwin Deen, a family doctor and nutrition educator, told ABC News that “an independent opinion of a food’s healthfulness is a good idea but as always, the devil is in the details.”

Walmart, the largest food retailer in United States, will put the new label on select products that meet defined criteria.in its Great Value and Marketside lines. Customers will begin to see the new label on products starting in the spring.

The company said the “Great for You” products meet the rigorous nutrition criteria established by the U.S. Food and Drug Administration, the U.S. Department of Agriculture and the Institute of Medicine.

“Moms are telling us they want to make healthier choices for their families but need help deciphering all the claims and information already displayed on products,” said Andrea Thomas, senior vice president of sustainability at Walmart.

Walmart’s New Label on Front of Packaging

One difference that sets Walmart’s labeling system apart from other nutrition labeling systems, such as NuVal scores, is that the label is on the front of the product rather than on store shelves.

Customers won’t have to remember what “healthy” products they purchased because they can see what they are when they look in their cupboards at home.

Walmart’s new labels will go on fruits and vegetables, as well as whole grains, high-fiber, low-fat dairy products, seeds, nuts and lean meats. The label limits the amount of total saturated and trans fats, added sugars and sodium levels a product can contain.

“I believe that Walmart’s initiative, in principle, is an excellent one, provided that the labeling is based on sound nutritional evidence,” said Pascal Imperato, dean of the School of Public Health at SUNY Downstate Medical Center in New York. “A stamp of approval as ‘healthy’ could mislead if it is not linked to label information about vitamin and mineral content, fat and sugar levels, chemical additives … all of which are of importance to sound and healthy nutrition.”

“People already have the information they need on the food label,” said Lona Sandon, an assistant professor of clinical nutrition at University of Texas Southwestern and a spokeswoman for the Academy of Nutrition and Dietetics. “Just turn the box around and take a look at the Nutrition Facts Panel. You do not need a special rating system to tell you that fruits, vegetables, whole grains and lean meats are good for you.”

But Walmart believes its “Great for You” label will make it easier for customers to find these healthy gems.

“Walmart’s effort to bring healthier food to kitchen tables nationwide was inspired by our customers and informed by the latest food science and policy,” said Leslie Dach, executive vice president of corporate affairs at Walmart.

Sandon said that many grocers had been using their own rating system to help shoppers choose healthier options.

“Walmart’s approach is not new. Many other stores are already doing this. In general, consumers seem to find these rating systems helpful,” Sandon said, “at least the consumers who are trying to make healthier choices.”

But others said that food chains like Walmart should hire outside agencies — such as the USDA or the Centers for Disease Control and Prevention — to rate foods and provide guidelines that can be applied across stores and settings.

Nutrition Experts: FDA Should Release Health Standards

“The food industry, at the end of the day, is in the business to make money by selling food,” said Dr. Stephen Cook of Golisano Children’s Hospital at the University of Rochester Medical Center. “If a ‘healthy’ label on their product gets it to be sold more, then they will try that — even if it is not true.”

Nutrition experts also told ABC News that the FDA should move faster on its 2009 plan to develop a nutritional gold standard for products labeled healthy.

“The FDA is responsible for package labels, so it makes sense that they would establish parameters for what goes on the label,” said Connie Diekman, director of University Nutrition at Washington University in St. Louis. “In addition, a consistent criteria for measuring ‘healthy’ would make shopping much easier for consumers.”

In a written statement, Walmart said the labeling criteria “have undergone an extensive evaluation process using thousands of grocery items to help ensure that only nutritious items in each grocery category receive the ‘Great for You’ icon.”

Walmart is not putting a restriction on the new labeling system and said other grocers are welcome to use the system.